Housing Market Bottom?

Are you a buyer waiting for the “right time to buy” ?  Well, that would be NOW!

Do not become obsessed with trying to time the bottom of the market so you can get the best deal.  In my 38 years as a broker, I have observed that we never really can identify the bottom of a market cycle until we are already on the upswing.

I offer these observances:

There is huge, pent-up demand for housing, we are entering a spring market, interest rates are still very low and sellers “get it” that their asking prices must be very competitive.

Our showing appointments have increased dramatically in the last few weeks and some properties are receiving multiple offers and selling for more than list price.  The overall activity in the market has increased with an upbeat attitude.

Once the mortgage/credit/qualifying standards relax a bit (and they will) and more approved buyers enter the marketplace, home prices will rise.

I strongly believe we are on the road to a real estate recovery, and if you have any thoughts a buying a home this year, NOW IS THE TIME!

As a buyer, the market could not be better today.  There are deals (and steals) out there today, of which we have not seen in nearly ten years.  Realistically, home prices in southeast Michigan are at levels roughly equivalent to those from 1999-2000.  I heard a report on the radio this morning that nationally we are at 2004 pricing. This provides truly an unbelievable opportunity for those who did not invest in real estate in the past to essentially jump back in time and take advantage of the best personal wealth builder available to most of us, a home.

I know what you’re thinking, what about the credit crunch?  It’s true, that credit may not be as readily available for any purchase, including a mortgage, today as it was a few years ago.  While the pendulum may have swung a little too far in the tightening direction recently, it’s because it had come from way too far in the loose direction in the years that proceeded.  Is it really a negative thing to think that we should be putting up a significant initial stake in the largest purchase most of us will ever make?  The bottom line is that there are still many options available for those who are looking to make a purchase.

So far this discussion has focused on the buying side of the equation.  And I know that my initial comment stated that your view point on the market depended on your role.  So I guess the natural assumption would be that if you are selling the market is not pretty.  That’s not necessarily true.  First of all, there is great deal of activity in the marketplace today. Yes, I just mentioned that prices are down from their record highs of the last few years. That said, everyone that is selling a primary residence must be moving somewhere.  For most, that means buying another home.  So the real question comes down to where and what you are buying.  If you are buying in the same general market and buying more home, you stand to do quite well in the “net” of the two transactions.  This will be the topic of my next article.

May be the single greatest factor affecting value.   Your city + your home’s location in the  subdivision or development = more or less percieved value by buyers.

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Competition

1.  Buyers compare your property against all competing properties for sale.  The more homes for sale, the tougher the competition.  Your pricing must take this into account.

2.  Buyers interpret value based on recently sold and available properties in your neighborhood.

Timing

1.   Current real estate trends may reflect a buyer’s or seller’s market
2.   Market conditions cannot be controlled.   An individually tailored, yet flexible, marketing plan must be developed accordingly.
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Condition

1.  Property condition affects the sale price and marketing time.
2.  Optimizing physical appearance and advance preparation for marketing maximizes the buyer’s perceived value.